Healey v Commissioner of Taxation: Assessment of share transactions: Capital Gains

In Healey v Commissioner of Taxation [2012] FCA 269 (23 March 2012) the applicant (Healey) appealed a 2009 income tax assessment for her 2006 income year and challenged the respondent’s (Commissioner's)  2009 administrative penalty assessment in respect of the same period.

The Commissioner argued Healey wass liable for Capital Gains Tax (CGT) on substantial trust distributions resulting from shares declared in her favour. Healey argued she had no knowledge of the transactions and had never received the funds. Although Healey asserts she had no contemporaneous knowledge of the transactions concerned, no steps were ever taken by Healey to deny the efficacy of the transactions. 

At issue were:

• the determination of a relevant CGT event

• the assessment of a cost base for the shares

• whether parties dealt at arm’s length in share acquisition

• whether insufficient evidence was adduced by the applicant to support the contention that parties did not deal at arm’s length

• whether it was fair and reasonable for an administrative penalty to be remitted

Conclusion

The Court decided that each of the appeal points advanced by Healey be rejected and the appeal be dismissed.

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